<PAGE>

                                                           EXHIBIT 10.26


                      CONSENT NUMBER 2 AND SECOND AMENDMENT

         CONSENT NUMBER 2 AND SECOND AMENDMENT, dated as of October 15, 1997
(this "CONSENT"), to the Fourth Amended and Restated Credit Agreement, dated as
of September 27, 1996 (as amended, supplemented or otherwise modified from time
to time, (the "CREDIT AGREEMENT"), among Petroleum Heat and Power Co., Inc. (the
"COMPANY"), the several banks and financial institutions from time to time
parties thereto (collectively, the "Banks") and The Chase Manhattan Bank
(formerly known as Chemical Bank), as agent for such Banks (in such capacity,
the "Agent").

                                 W I T N E S S E T H:

         WHEREAS, the Company, the Banks and the Agent are parties to the
Credit Agreement;

         WHEREAS, the Company has requested that the Agent and the Banks
consent to the sale by the Company of its Hartford, Connecticut operations and
to the retention by the Company of a portion of the proceeds of such sale;

         WHEREAS, the Company has further requested that the Agent and the
Banks amend certain provisions of the Credit Agreement, as more fully described
herein;

         WHEREAS, the Agent and the Banks are willing to consent to such
transactions and to such amendments, but only upon the terms and subject to the
conditions set forth herein;

         NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained and for other good and valuable consideration the sufficiency
of which is hereby acknowledged, the parties hereto hereby agree as follows:

         1.  DEFINED TERMS.  Unless otherwise defined herein, terms defined in
the Credit Agreement are used herein as therein defined.

         2.  AMENDMENT OF SCHEDULE I.  (a)  Schedule I of the Credit Agreement
hereby is amended by deleting said Schedule I in its entirety and by
substituting therefor the new Schedule I which is set forth as Annex I to this
Consent.

         (b)  Each of the parties hereto hereby acknowledges and agrees that,
after giving effect to such amendment of Schedule I, First Union National Bank
shall cease to be a "Bank" party to the Credit Agreement and that each other
Bank shall be deemed to have the Commitments described in such new Schedule I.

         (c)  On the Effective Date, each remaining Lender shall make a loan to
the Company in such amount as shall be determined by the Agent to be necessary
to cause all principal owing to First Union National Bank to be paid in full and
to cause the aggregate amount of outstanding Loans to be provided ratably by the
remaining Lenders.

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                                                                               2



         3.  CONSENT TO SALE OF OPERATIONS AND APPLICATION OF PROCEEDS.  (a) 
The Agent and the Banks hereby consent to the sale by the Company of its TLC
branch in Hartford, Connecticut for aggregate consideration of not less than
$15,500,000 (the "HARTFORD SALE") and hereby waive compliance with the
provisions of subsection 10.4 of the Credit Agreement to the extent and only to
the extent necessary to permit the Hartford Sale.

         (b)  The Agent and the Banks hereby consent that the Company may
retain a portion of the Net Cash Proceeds from the Hartford Sale, such that (i)
not less than $9,350,000 of such Net Cash Proceeds are applied on the closing
date of the Hartford Sale to cash collateralize the Acquisition Letters of
Credit pursuant to the Cash Collateral Agreement and (ii) an additional amount
of such Net Cash Proceeds shall be applied on or prior to June 30, 1998 to the
extent necessary to cash collateralize the Acquisition Letters of Credit in
accordance with the requirements of Section 5.7 of the Credit Agreement.  The
Agent and the Banks hereby waive compliance with the provisions of subsection
6.4 of the Credit Agreement to the extent and only to the extent necessary to
permit the Company to retain any Net Cash Proceeds from the Hartford Sale which
are not required to be applied to cash collateralize the Acquisition Letters of
Credit in accordance with the terms of this clause (b).  

         (c)  The Company hereby acknowledges and agrees that (i) any failure
to provide the cash collateral described in clause (b) above in a timely manner
shall constitute an Event of Default under the Credit Agreement and (ii) during
such time as the aggregate undrawn and unexpired face amount of the Acquisition
Letters of Credit exceeds the amount on deposit in the Cash Collateral Account
established pursuant to (and as defined in) the Cash Collateral Agreement, the
Company shall have no right to request the withdrawal of any amounts so on
deposit pursuant to Section 2(b)(ii) of the Cash Collateral Agreement.

         (d)  The Banks hereby authorize and instruct the Agent to deliver such
documents, instruments and agreements as the Company may from time to time
reasonably request in order to effect the release of any security interests held
by the Agent in assets of the Company and its Subsidiaries which are being
transferred pursuant to the Hartford Sale.

         4.  REDUCTION OF WORKING CAPITAL COMMITMENT.  The Company hereby
irrevocably requests the reduction of the Working Capital Commitments to
$47,000,000 pursuant to subsection 6.2 of the Credit Agreement.  The Company,
the Banks and the Agent hereby consent that such reduction of the Working
Capital Commitments shall become effective on and as of the Effective Date.

         5.  AMENDMENTS TO LINE LETTER.  Each Bank hereby agrees that the
modification of the Line Letter, dated as of September 27, 1996 (as amended,
supplemented or otherwise modified from time to time, the "LINE LETTER"), among
the Banks as follows:

(a) First Union National Bank hereby terminates its Ratable Share thereunder
    (and as defined therein), with such termination being effective on the
    Effective Date;

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                                                                              3



(b) from and after the termination of the Ratable Share of First Union National
    Bank, First Union National Bank shall be released from any and all
    participating interests and other rights and obligations (other than any
    right to receive fees owing to it which accrued prior to the Effective
    Date) in respect of outstanding Letters of Credit under the Line Letter and
    such participating interests and other rights and obligations shall instead
    be assumed ratably (in accordance with their Ratable Shares, after giving
    effect to the provisions of clause (c) below) by the other Banks parties to
    the Line Letter.

(c) from and after the termination of the Ratable Share of First Union National
    Bank, the respective Ratable Shares and Cap Amounts of the remaining Banks
    shall be as set forth below:

                   Bank                     Ratable Share       Cap Amount
         The Chase Manhattan Bank                41.18%         $4,941,600
         BankBoston, N.A.                        29.41%         $3,529,200
         NationsBank, N.A.                       29.41%         $3,529,200


         8. REPRESENTATIONS AND WARRANTIES.  The Company hereby confirms,
reaffirms and restates the representations and warranties set forth in Section 8
of the Credit Agreement; PROVIDED that each reference to the Credit Agreement
therein shall be deemed to be a reference to the Credit Agreement after giving
effect to this Consent.  The Company represents and warrants that no Default or
Event of Default has occurred and is continuing.

         9.  EFFECTIVENESS.  This Consent shall become effective on the first
date upon which the Agent has received (such date, the "EFFECTIVE DATE"):

    (a)  counterparts hereof, duly executed and delivered by the Company and
         each of the Banks; and

    (b)  an amendment fee, for the ratable account of each remaining Bank
         (after giving effect to this Consent), in the amount equal to
         $175,000.

         10.  CONTINUING EFFECT OF CREDIT AGREEMENT.  This Consent shall not
constitute a waiver or amendment of any other provision of the Credit Agreement
not expressly referred to herein and shall not be construed as a waiver or
consent to any further or future action on the part of the Company that would
require a waiver or consent of the Banks or the Agent.  Except as expressly
amended hereby, the provisions of the Credit Agreement are and shall remain in
full force and effect.

         11.  COUNTERPARTS.  This Consent may be executed by the parties hereto
in any number of counterparts, and all of such counterparts taken together shall
be deemed to constitute one and the same instrument.

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                                                                              4



         12.  GOVERNING LAW.  THIS CONSENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

         IN WITNESS WHEREOF, the parties hereto have caused this Consent to be
duly executed and delivered in New York, New York by their proper and duly
authorized officers as of the date first above written.

                                  PETROLEUM HEAT AND POWER CO., INC.
                             
                             
                                  By:                           
                                     -------------------------
                                     Title:  
                             
                                  THE CHASE MANHATTAN BANK (formerly known as 
                                  Chemical Bank), a Bank
                             
                             
                                  By:                      
                                     -------------------------
                                     Title:  
                             
                                  BANKBOSTON N.A. (formerly known as The First
                                  National Bank of Boston)
                             
                             
                                  By:                      
                                     -------------------------
                                     Title:  
                             
                                  NATIONSBANK, N.A.
                             
                             
                                  By:                      
                                     -------------------------
                                     Title:  
                             
                                  FIRST UNION NATIONAL BANK (formerly known as
                                  First Union Bank of Connecticut and First
                                  Fidelity Bank)
                             
                             
                                  By:                     
                                     -------------------------
                                     Title:  

<PAGE>

                                       ANNEX I
                                          to
                        CONSENT NUMBER 2 AND SECOND AMENDMENT          


                                                                      SCHEDULE I


                   Commitments; Commitment Percentages;
                         ADDRESSES FOR NOTICES



                                WORKING CAPITAL     ACQUISITION    COMMITMENT
ADDRESS FOR NOTICES               COMMITMENT        COMMITMENT     PERCENTAGE
-------------------               ----------        ----------     ----------

The Chase Manhattan Bank          $19,354,600.00      $6,932,480.46    41.18%
7600 Jericho Turnpike
Woodbury, NY 11797
Attn:  John Mast   

BankBoston N.A.                   $13,822,700.00      $4,951,050.27    29.41%
100 Federal Street, #010802
Boston, MA 02110
Attn:  Michael Hannon

NationsBank, N.A.                 $13,822,700.00      $4,951,050.27    29.41%
767 Fifth Avenue
New York, NY 10152
Attn:  Eileen Higgins

              TOTAL               $47,000,000.00      $16,834,581.00  100.00%
                                  --------------      --------------  -------
                                  --------------      --------------  -------

<PAGE>

                             ACKNOWLEDGEMENT AND CONSENT


         Each of the undersigned hereby (a) acknowledges and consents to the
terms of Consent Number 2 and Second Amendment to which this Acknowledgement and
Consent is attached and (b) agrees that all Security Documents to which it is a
party are, and shall remain, in full force and effect, both before and after
giving effect to such Consent Number 2 and Second Amendment.

                             MAXWHALE CORP.
                             ORTEP OF CONNECTICUT, INC.
                             PETRO, INC.
                             PETRO/CRYSTAL CORP.
                             ORTEP OF STATEN ISLAND, INC.
                             CBW REALTY CORP. OF CONNECTICUT
                             OCENNET FUEL OIL CORP.
                             ORTEP OF NEW JERSEY, INC.
                             PUBLIC FUEL SERVICE CO., INC.
                             ORTEP OF PENNSYLVANIA, INC.
                             MAREX CORPORATION
                             A.P. WOODSON COMPANY, INC.
                             
                             
                             By:                           
                                Title: